St Vincent and The Grenadines : Economy

Economy

GNI:

US$722m

GNI PC:

US$6,580

GDP Growth:

–0.6% p.a. 2009–13

Inflation:

1.7% p.a. 2009–13

St Vincent and the Grenadines has a relatively undeveloped economy, nevertheless providing a relatively high quality of life. It is vulnerable as the economic base is very small, and is heavily dependent on agriculture, especially bananas.

The main export crop, bananas, was sold to the EU under its preferential arrangements, but since these ended in 2007, Caribbean banana producers have faced a tougher competitive environment, and small, less efficient producers have moved out of banana production. The government has encouraged diversification into tourism, manufacturing, offshore finance and call centres, and has promoted growth of the private sector.

Economic growth fluctuates with agricultural output and prices on world markets. The economy has, however, been prudently managed and inflation and debt have generally been relatively modest. By the mid-2000s, with new investment in tourism infrastructure, economic growth was strong – averaging 5.6 per cent p.a. 2004–08 – but in the face of the world economic downturn of 2008–09, slowed sharply in 2008 (1.4 per cent) and contracted in 2009 (by 2.1 per cent) and 2010 (3.4 per cent), before a return to more modest growth in 2011–15.